Port Richey leaders plan to scrutinize spending

PORT RICHEY — City officials have pledged to keep much tighter control of Port Richey's purse strings in response to an audit that raised concerns over two major purchases that eventually led to the firing of then-City Manager Ellen Posivach.

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On Thursday, the City Council received a final audit by the accounting firm Baggett, Reutimann & Associates of the 2009-10 fiscal year that touched on the controversial financial episode.

Auditors said Posivach last year purchased a $34,327 data acquisition system without a necessary special council meeting to approve an emergency purchase of more than $25,000. Posivach acted after a lightning strike damaged the original system.

Also last year, the city purchased a new water meter system, and in doing so added a communications tower to the contract. Baggett's auditors said the construction contract to build the tower exceeded $25,000 and should have been put out to bid.

"Large purchases are being made without being let out for public bid, and the city council and taxpayer have no way of knowing if the contract prices are fair and reasonable," the audit report states.

In response to the audit's conclusions, acting City Manager Dave Brown, who is also the police chief, wrote the council that a position has been established to review all purchases more than $500.

Brown also said at Thursday's meeting that before any purchases are processed "several signatures" will be needed for a thorough review, including the city manager and finance director.

"This process will help ensure uniformity and consistency in procuring goods and services on behalf of the city and will make the procurement process as transparent as possible, thereby increasing public confidence," Brown wrote.

Baggett's audit also found that the city's net assets decreased last fiscal year by $241,304, or 1.2 percent, with costs of services of more than $3.3 million exceeding general revenues of $3.1 million.

The city also spent $903,953 on capital improvements including $299,000 for a fire truck, $117,273 for public safety vehicles and $922,610 for water meter upgrades, the report states.

After the presentation on the struggles in 2010, there was cause for cautious optimism and a few grins from council members upon learning the city's finances are in the black for the first six months of the fiscal year.

As of March 31, the city had brought in $158,526 more in revenues such as ad valorem taxes than budgeted, and spent $196,948 less than expected to run the city. It amounts to an excess of revenues over expenditures of $355,473, according to accountant Peter Schatzel, who presented a current financial status to the council.

The city is also poised to see an increase in revenue collected by its water department after a rate hike that took effect in December. It is projected to bring in an additional $3 million, up $800,000 from 2010.